Head to Head Review: RADA Electronic Ind. (RADA) & MRV Communications (MRVC)

RADA Electronic Ind. (NASDAQ: RADA) and MRV Communications (NASDAQ:MRVC) are both small-cap aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

RADA Electronic Ind. has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, MRV Communications has a beta of -1.88, indicating that its share price is 288% less volatile than the S&P 500.

Valuation & Earnings

This table compares RADA Electronic Ind. and MRV Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RADA Electronic Ind. $12.82 million 7.69 -$4.91 million $0.04 82.27
MRV Communications N/A N/A N/A ($1.30) -7.68

MRV Communications has lower revenue, but higher earnings than RADA Electronic Ind.. MRV Communications is trading at a lower price-to-earnings ratio than RADA Electronic Ind., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for RADA Electronic Ind. and MRV Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RADA Electronic Ind. 0 0 0 0 N/A
MRV Communications 0 0 1 0 3.00

MRV Communications has a consensus target price of $14.00, suggesting a potential upside of 40.28%. Given MRV Communications’ higher possible upside, analysts clearly believe MRV Communications is more favorable than RADA Electronic Ind..

Insider & Institutional Ownership

4.7% of RADA Electronic Ind. shares are held by institutional investors. Comparatively, 40.9% of MRV Communications shares are held by institutional investors. 1.0% of RADA Electronic Ind. shares are held by insiders. Comparatively, 5.5% of MRV Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares RADA Electronic Ind. and MRV Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RADA Electronic Ind. 5.56% 7.15% 4.43%
MRV Communications -10.63% -30.83% -13.90%

Summary

RADA Electronic Ind. beats MRV Communications on 6 of the 10 factors compared between the two stocks.

RADA Electronic Ind. Company Profile

RADA Electronic Industries Ltd. is an aviation and defense company. The Company develops, manufactures and sells defense electronics, including, avionics solutions (including avionics for unmanned aerial vehicles (UAVs)), airborne data/video recording and management systems, inertial navigation systems and tactical land radars for defense forces and border protection systems. The Company’s product lines include Military avionics (Data/video recorders, core avionics for aircraft and UAVs); Inertial navigation systems (INS) for aerial and land platforms, and Tactical Radars for defense forces and border protection systems (land-based). The Company’s INS products are used by multiple combat platforms and weapon systems. The Company develops ground radars for tactical applications, such as defense forces protection and border protection. Its products are primarily sold to governmental agencies, governmental authorities and government-owned companies.

MRV Communications Company Profile

MRV Communications, Inc. (MRV) is a supplier of communications solutions to telecommunications service providers, enterprises and governments throughout the world. The Company’s products enable customers to provide high-bandwidth data, and video services and mobile communications services. The Company operates through Network Equipment segment. Its Network Equipment segment designs, manufactures, sells and services equipment used by commercial customers, governments and telecommunications service providers. Its products include switches, optical transport platforms, physical layer products and out-of-band management products, and specialized networking products. MRV markets and sells its products, through a range of channels, which include a direct sales force, manufacturers’ representatives, value-added-resellers, distributors and systems integrators. The Network Equipment business includes two business units: Optical Communications Systems division and Appointech, Inc.

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